JOB ORDER COSTING (GROUP ACTIVITY)
SIGE LANG Company has the following balances as of January 1, 2024:
Materials (direct and indirect) P 17, 578
Work-in-Process 12,066
Finished Goods 4,000
Details:
Materials
A 900 @ 7.75 6,975
B 300 @ 6.25 1,875
C 620 @ 5.40 3,348 12,198
Work-in-Process
Materials:
A 300 @ 7.00 2,100
C 405 @ 5.20 2,106 4,206
Direct Labor:
600 hrs @ 5 3,000
Overhead
Budget Actual
Direct Labor hours 400 600
Factory Overhead Cost 3,240 6,000
During 2024, the following transactions occurred:
1. Purchased raw materials on account amounted to 23,843.
A 1,000 @ 8.00 C 960 @ 5.50
B 880 @ 6.00 D 670 @ 4.90
2. Materials requisitioned for production during January were as follows:
Job #001: Material A -300 Job #002: Material A -600 Job #003: Material B -650
Material B -450 Material D -670 Material C -810
Material C -290
3. Labor costs amounted to 9,600, of which 33.85% (500hrs) belongs to Job #001, 28.65% (550) to
Job #002.
4. SIGE LANG Company applies factory overhead on the basis of direct labor hours. Budget and actual
data for direct labor and overhead for January are as follows:
Budget Actual
Direct Labor hours 1,600 1,650
Factory Overhead Cost 23,000 ?
5. Actual Overhead costs incurred include:
Utilities: 7,000 Indirect Materials: 5,000
Factory Depreciation: 10,000 Indirect Labor: ?
Repairs & Maintenance: 3,000
6. Job #001 and Job #003 were completed but only Product X was sold for P 40,000.
7. Selling & Administrative expenses amounted to 9,000.
Additional information:
• SIGE LANG Company uses FIFO method in using or requisitioning materials into production.
• Job #001- Product X
#002- Product Y
#003- Product Z
• 20% for missing amount in actual manufacturing overhead. Conversion Cost using actual overhead
39,600.
Required:
1. Predertimined Overhead rate 5. Materials Issued.
2. Indirect materials on January 31. 6. Work-in-Process credited.
3. Cost of Goods Manufactured Schedule. 7. Finished Goods transferred.
4. Cost of Goods Sold (normal and actual).
Solutions & Computations:
1. OH rate = 23,000 = 14.375 4. Cost of Goods Manufactured 49,717
1,600 Add: Finished Goods, Beg. 4,000
2. Materials, beg 17, 578 Total Goods Available for Sale 53,717
Less: Direct Materials 12, 198 Less: Finished Goods, End (32,613)
5,380 Cost of Goods Sold- normal 21,104
Add: Purchases (23,843) Add: Underapplied Overhead 6,281
29,223 Cost of Goods Sold- actual 27,385
Less: Direct Materials ( 21,843)
Total Indirect Materials 7,380 5. Material A 900 @ 7.75 6,975
Less: Issued Indirect Materials (5,000) B 300 @ 6.25 1,875
Indirect Materials, end 2,380 800 @ 6.00 4,800
C 620 @ 5.40 3,348
3. Schedule of Cost of Goods Manufactured 480 @ 5.50 2,640
D 670 @ 4.90 3,283 22,921
Direct Materials
Materials, Beg. 17, 578 6. Work-in-Process .
Indirect Materials (5,380) Beg. 12,066
Add: Purchases 23,843 Materials 22,921
Indirect Materials (2,000) Direct Labor 9,600 Job #003
Direct Materials, End (11,120) Overhead 23,719 49,717 Job #001
Direct Materials Issued 22,921 18,589
Direct Labor 9,600 7. Job #001
Applied Overhead 23,719 Materials 6,666
Total Manufacturing Cost 56,240 DL 3,250
Work-in-Process, Beg. 12,066 Overhead 7,188
Work-in-Process, End (18,589) Wip, Beg. 4,000
Cost of Goods Manufactured 49,717 21,104
• Actual overhead= 25,000÷120%= 30,000, indirect labor 30,000-25,000=5,000.
• Job #001 9,600 × 33.85%= 3,250.
• Job #002 9,600 × 28.65%= 2,750.
• Job #001 overhead 14.375 × 500= 7,188.
• Job #002 overhead 14.375 × 550= 7,906.
• Job #003: 1,650 actual direct labor hours -1,050 (Job #001 & #002)= 600 hours.
• Job #003 14.375 × 600= 8,625.